Chapter 1: Introduction
Books do not usually start with an appendix, but perversely this one does. The appendix provides a rather dull explanation of all the different terms used to describe the alternative to the ‘capitalist’ banks that have let us down so badly over the last few years. The problem is that we have become so conditioned to seeing investor-owned banks as the norm that when we try to describe an alternative words fail us; we do not know how to describe it. This book will show that there is an alternative banking system that has a long and distinguished history, and in many countries already is a serious competitor to other kinds of banks. However, because of historical accidents and misunderstandings it now comes in several guises: cooperative banks, credit unions, savings and credit cooperatives, building societies, mutual savings and loans, and so on. In order to see the alternative we first have to name it. We need an umbrella term, and so this book is about customer-owned banks. The idea of customer-ownership is simple. Some banks avoid the need for a group of investors who take ownership rights over the business. They turn their customers into owners instead. There are all sorts of consequences to this decision that will be explored in the book.